April 22 (Bloomberg) -- Abu Dhabi, with most of the crude
in the United Arab Emirates, will raise output capacity to 3.5
million barrels a day to supply foreign buyers and feed an
expanded local refinery, the head of the state oil company said.

Abu Dhabi National Oil Co., known as Adnoc, will reach its
capacity target by 2017, Director General Abdulla Nasser al-Suwaidi said today in Abu Dhabi, the U.A.E.’s capital and
largest sheikhdom. The emirate pumps 2.7 million barrels a day
of crude, he said. Its current capacity is 2.8 million,
according to data compiled by Bloomberg.

Some of the new production will supply expanded units at
Adnoc’s refinery at the town of Ruwais on the Persian Gulf
coast. The company plans to double processing capacity at the
400,000 barrel-a-day plant by the end of 2014, al-Suwaidi said
at the Middle East Petroleum and Gas Conference.

Oil producers in the Gulf region are expanding refineries
to satisfy domestic demand and reduce the need for imported
fuel. Saudi Arabia, the world’s largest crude exporter, buys
gasoline and diesel to meet peaks in domestic consumption.
Neighboring Abu Dhabi imports gasoline and exports some diesel
on a spot basis, Sultan Al Mehairi, Adnoc’s director of refining
and marketing, told reporters at the conference. The emirate can
meet its gasoline needs once the expanded Ruwais facility
operates at full capacity, he said.

Pipeline Exports

Abu Dhabi exports some of its crude though a pipeline to
Fujairah, the U.A.E.’s main oil port outside the Strait of
Hormuz, Al Mehairi said, without specifying the amount of crude
exported from there. Adnoc will gradually boost the flow through
this link, he said. Hormuz, at the mouth of the Persian Gulf, is
a bottleneck for a fifth of the world’s oil supplies.

Al-Suwaidi said Adnoc expects to select partners in January
for Abu Dhabi’s main onshore oil concession. The current
contracts expire that month, and he denied that the deadline
might be extended.

BP Plc, Royal Dutch Shell Plc, Exxon Mobil Corp. and Total
SA, all partners in the existing concession, are among the
companies Adnoc asked to bid by October, he said.

Adnoc has also made a recommendation to Abu Dhabi’s Supreme
Petroleum Council, the emirate’s main body for energy policy,
about its preferred partner for development of the Bab natural
gas field, al-Suwaidi said. He didn’t identify the preferred
partner for the field, which contains so-called sour gas high in
sulfur dioxide.

Shell is “in good standing” for the Bab project, al-Suwaidi said. An Adnoc official said last month the company had
recommended two partners for the field. Total didn’t win the
bidding, the company’s Chief Executive Officer Christophe de
Margerie said on April 4 in Paris.

Adnoc and Occidental Petroleum Corp. will start producing
next year at the Shah sour-gas field, al-Suwaidi said.